Marconi’s rump business is to press on with an EGM to support a £346m (US$560m) acquisition despite hedge fund opposition.
Telent, the UK communications network company which comprises the remainder of the Marconi business, has announced that it plans to proceed with an EGM on Friday, 4 August, to vote on resolutions which will approve a £346m (US$560m) recommended takeover by Holmar Holdings Limited, a company formed by US buyout group Fortress Investment Group.
The decision to proceed with the EGM, and to repeat the recommendation for the Holmar offer, follows discussions with Polygon, the hedge fund which has opposed the takeover.
Polygon owned 14.7m shares, representing 23.9% of the telent share capital, at the time of telent’s last adjourned EGM on 21 July. Following the discussions between telent and Polygon, regarding the adequacy of the offer, the potential to restructure the transaction, and the possible participation of Polygon in a consortium to acquire telent, the board of telent states that the discussions have “not resulted in any feasible proposal.”
The differences centre on telent’s £2.7bn pension fund and its £490m escrow account, from which Polygon is seeking to ensure an early release back to the company.
Telent explains that rather secure an early release of funds, Holmar, in order to obtain clearance from the Pensions Regulator for the offer, has in fact agreed to establish an additional escrow account “potentially to provide additional future funding of the Pension Plan.”